Chart Check (Cheap Dollar?)

As you’re probably aware, persistent rhetoric from the new administration has sent the dollar tumbling over the past couple of weeks.

According to Goldman, the greenback has undershot based on yield differentials (which, you’ll not, I’ve been talking about here and elsewhere for months).

In the left pane below, find the residual on Goldman’s fair value model (don’t get hung up with the lingo – basically it’s just a chart of undervalued versus overvalued with negative readings conveying a cheap dollar).

dollar

(Goldman)

 

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